World oil supply on the rise
Following on from my previous post, the increase in the supply of oil is starting to cause problems with regards to storage. According to The Economist (see graphic) US petroleum stocks rose by 4m barrels last week which is an 80 year seasonal high. Add this to the anticipated increase in supply from Iran after the sanctions were lifted and you have a significant increase in supply. However with reduced demand where is the supply going to housed? At this time of year, with the Northern Hemisphere winter, oil stocks usually dwindle but supply actually increased in Q4 2015 by a record 1.8m barrels a day according to the International Energy Agency. It wasn’t so long ago that investors were buying oil and keeping it in oil tankers waiting for the price to rise.